People are loading up their pickup trucks with gold a gram or two at a time encased in credit-card sized chunks of plastic? What would a a one gram gold bar cost me right now?

Anywhere from 0 out-of-pocket cost to 50, but imo, Karatbars are NOT for people like you.You've made it pretty clear you view gold as a growth investment vehicle, rather the dollar cost averaged long term store of value or insurance karatbars was designed to be.

"This flushing out of weak-handed, short-term gold speculators will prove a valuable entry point for those who have felt they missed the gold rush over the last few years," says Heskin.

"Gold's healthy price correction below $1,400/oz. should be viewed as the best buying opportunity in the last year. Market fundamentals remain solid," said author and Swiss America Chairman Craig R. Smith.

Mr. Smith remains confident the 21st century rush toward a new gold standard and away from a debt-driven culture is far from over, "The strong fundamentals driving this flight to safety could continue to propel gold prices above $2,000/oz."

The recent price dip offered the 9th major gold buying opportunity since 2003. The average price rebound following price dips is 36%! Better yet, this was only the third time in a decade that gold prices have dipped near 20%.

Gold prices have risen dramatically in recent years based on safe haven buying by individuals, institutions, Central banks worldwide as well as ETFs and other short-term speculators. Investors around the globe are diversifying their assets into the world's safest asset, gold, the new standard for measuring currencies worldwide.

During every single gold price consolidation over the last decade most "experts" predicted gold prices had topped. They were wrong. Gold bears claiming the charts are saying "sell" will be wrong again.

Do not be distracted by media hype over gold price corrections or talk about a new gold "bubble". Instead, keep your eyes on the facts and your focus on the fundamentals. The above 10-year gold chart illustrates nine major gold price corrections in this bull market since 2003:

Following each of the previous EIGHT major corrections, gold prices have risen an average of 36%. The next leg of this bull market could lift gold prices above $2,100* an ounce.

"Now is an excellent time to buy! If the gold market continues in the same pattern witnessed over the last decade, 2013 may be one of the last opportunities to buy gold below $2,000/oz. Reports of gold's 'death' over the last decade have not only been greatly exaggerated, but will again be proven wrong. Central banks from Bangkok to Boston are creating fiat money, therefore the worst is ahead for the dollar and the best is ahead for gold owners," said author and Swiss America Chairman Craig R. Smith.

I understand the benefits of the gold bar.....I just prefer AGE or Krug...or NTR as I actively work with them.

You do realize that you don't own any gov't issued gold right?The way they've got the game rigged is that all gov't issued gold is still owned by the gov't.You are merely the bearer of the gold, and the gov't can recall it's gold whenever they want, and subject you to penalties of imprisonment if you don't turn it in at whatever price they designate for it.

When I discovered that, I stopped acquiring Maple leafs. I'll still accept one if it is gifted to me, but I won't actively pursue acquiring them. It's only privately issue and privately vaulted LBMA GDL for me.

Anywhere from 0 out-of-pocket cost to 50, but imo, Karatbars are NOT for people like you.You've made it pretty clear you view gold as a growth investment vehicle, rather the dollar cost averaged long term store of value or insurance karatbars was designed to be.

That's true. I don't think that a "long term store of value" (if that's what you want to call gold) makes sense unless you already have a couple of hundred million in other assets.

You are merely the bearer of the gold, and the gov't can recall it's gold whenever they want, and subject you to penalties of imprisonment if you don't turn it in at whatever price they designate for it.

Perhaps they can't - but, contrary to your assertion, this doesn't only apply to "gov't issued gold." But don't take my word for it; look at Executive Order 6102 which contained the following text in Section 2: "All persons are hereby required to deliver on or before May 1, 1933, to a Federal Reserve bank or a branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion, and gold certificates now owned by them or coming into their ownership on or before April 28, 1933 [...]"

When I discovered that, I stopped acquiring Maple leafs. I'll still accept one if it is gifted to me, but I won't actively pursue acquiring them. It's only privately issue and privately vaulted LBMA GDL for me.

It's unclear why you think that privately issued gold is special, or that private vaulting makes a difference. If you are afraid that your gold is subject to confiscation by the government, then it doesn't matter who issued it and in whose vault it is stored. Again, don't take my word for it. Look at Executive Order 6102. Under it you'd be turning your privately issued, privately vaulted LBMA GDL gold.

No, you are just the bearer of the gold. If the gov't issues it, it belongs to the gov't. You are merely the bearer who has been granted authority to use it. It however is NOT yours. It's like a bank debit or credit card. It belongs to the issuer. You are simply allowed to use it, ...until they decide you no longer can.

Perhaps they can't - but, contrary to your assertion, this doesn't only apply to "gov't issued gold." But don't take my word for it; look at Executive Order 6102 which contained the following text in Section 2: "All persons are hereby required to deliver on or before May 1, 1933, to a Federal Reserve bank or a branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion, and gold certificates now owned by them or coming into their ownership on or before April 28, 1933 [...]"

It's unclear why you think that privately issued gold is special, or that private vaulting makes a difference. If you are afraid that your gold is subject to confiscation by the government, then it doesn't matter who issued it and in whose vault it is stored. Again, don't take my word for it. Look at Executive Order 6102. Under it you'd be turning your privately issued, privately vaulted LBMA GDL gold.

I believe it is special because precedent has already been set, not only in the USA, but in many countries around the world. There have been many countries who have over the years made gold ownership illegal, or who have imposed restrictions on importing gold, or trading in gold bearing certain hallmarks.

When it was done in Romania, the only gold coins & bars NOT subject to recall, was religious, numismatic or privately issued and acquired outside of Romania.

I have no desire to start collecting religious gold. I have no desire to pay a premium for a numismatic's perceived value, or a craftsman's skill.

Privately issued gold can easily be melted down, refashioned, and willed to progeny. Privately issued Gold within a private vault is not as easily turned over against your will as a result of government decrees... especially when the entities involved operate ABOVE the line.

That line being ... subject to legislation decreed by a foreign country.

That's why you can kick back with a beer or get shitfaced on Jack Daniels despite what Saudi Arabia decrees vis-a-vis alcohol and it's consumption.

No, you are just the bearer of the gold. If the gov't issues it, it belongs to the gov't. You are merely the bearer who has been granted authority to use it. It however is NOT yours. It's like a bank debit or credit card. It belongs to the issuer. You are simply allowed to use it, ...until they decide you no longer can.

That's a ridiculous argument. Do you also believe that your car belongs to the company that made it?

Sorry, I'm no lawyer with a bookcase full of legal references and case history at my fingertips, ...and won't be searching for the reference. But others are perfectly able to look for it if they wish.

The simple fact is that you cannot justify that position or the position above. You can claim it's true, of course, but you cannot justify it. And I don't think anyone should give any weight to your unsubstantiated claims. They are blatantly wrong.

I believe it is special because precedent has already been set, not only in the USA, but in many countries around the world. There have been many countries who have over the years made gold ownership illegal, or who have imposed restrictions on importing gold, or trading in gold bearing certain hallmarks.

Countries which made gold ownership illegal banned gold outright, with little regard for the shape or the issuer. Short of restrictions imposed on Nazi gold, I know of no other cases in modern times where gold was restricted based on hallmarks. That's not to say that it didn't happen. You could provide some references perhaps?

Privately issued gold can easily be melted down, refashioned, and willed to progeny.

You can melt down, refashion and will to progeny a gold eagle issued by the U.S. Mint just as easily as you can melt down, refashion and will to progeny a bar from Engelhard. Ironically enough, Karatbars are the least flexible here.

Privately issued Gold within a private vault is not as easily turned over against your will as a result of government decrees... especially when the entities involved operate ABOVE the line.

Privately vaulted gold is trivially turned over. The 6102 Executive Order required that all gold be turned over (listing only a handful of exceptions) whether it was held by people or corporations and regardless of form or issuer, and provided for penalties for non-compliance. Private companies complied readily.

And sure, you can keep your gold vaulted in another country, but that comes with a host of other issues. First and foremost is that you've doubled your risk. You now have to worry about the legal environment in your country and in the country in which your gold is vaulted. If the company vaulting your gold is incorporated in a third country, you've tripled your original risk and have to worry about yet another legal environment.

Beyond the fact that the company that owns the vault still operates within the legal framework of the country in which the vault is located you also have to consider that the company could be compelled to appear before a Court in any country in which it does business (since by doing so it has, likely, subjected itself to the laws of said country).

Of course, there's also the issue of ease of access - something you frequently bring up. How easily can you access that gold if it's, say, Germany and you're located in the United States? The time difference alone could be an issue.

That's why you can kick back with a beer or get shitfaced on Jack Daniels despite what Saudi Arabia decrees vis-a-vis alcohol and it's consumption.

It's true that *I* am not operating under Saudi laws. But you're mixing apples and oranges. My booze isn't kept in a vault in Saudi Arabia. If it was Saudi laws vis-à-vis alcohol would certainly apply. Not to mention that pouring a glass would be a huge pain in the ass.

I'm sorry, but youtube videos referencing someone whose business involves peddling gold and silver ($11,000/ounce any time now!!!) while writing alarmist books about the coming collapse for the dollar (it's been coming now for almost a decade... is it here yet? the hot appetizers are gonna get cold soon!) and who sees conspiracies don't count for very much in my book.

That's a ridiculous argument. Do you also believe that your car belongs to the company that made it?

No I do not, ...and neither would anybody else believe such a ridiculous premise vis-a-vis a car, or anything else they have legally purchased. Therein is the rub. It is so ridiculous a concept that who would ever suspect such a ridiculous premise? ...however... thus is the case with gold. Just another nasty surprise waiting to happen. Hopefully it never does, ...but it could. The framework is in place.

The premise is almost as ridiculous a premise as the great bastion of freedom... the USA ever getting rid of the 1st, 2nd, or 4th amendment. As ridiculous and as impossible a premise as the USA going from a free country to a socialist dictatorship.

There are too many ridiculous premises floating about so it is up to you to discern what is in fact within the realm of possibility.

The simple fact is that you cannot justify that position or the position above. You can claim it's true, of course, but you cannot justify it. And I don't think anyone should give any weight to your unsubstantiated claims. They are blatantly wrong.

There is no reason why anyone should give any weight to why I do what I do or why.I don't dispense financial or tax planning advise. I'm simply stating what I do and why.I do think that rather than demand someone justify their own reasoning for conducting their own affairs, that people should do some Due Diligence on their own. I'm not saying everyone should do as I do. I'm simply stating what I do and why. If it makes sense for someone else to do the same, ...that is for them to decide for themselves. Who am I to tell a marine he shouldn't have a haircut. You wouldn't catch me dead with one of those haircuts, but military personnel wear their hair like that for a reason. And after a thorough examination of the situation, I understand why they do. makes sense to me, and I would never ridicule one of them for it.

Countries which made gold ownership illegal banned gold outright, with little regard for the shape or the issuer. Short of restrictions imposed on Nazi gold, I know of no other cases in modern times where gold was restricted based on hallmarks. That's not to say that it didn't happen. You could provide some references perhaps?

You just named a great example... Nazi gold.

Now let's look at what the nazi's did... they rose to power in the middle of a severe economic downturn, guided along by a charismatic and eloquent dictator, and well timed false flag acts of terrorism that were skillfully exploited to garner support for ushering in agenda based legislation and denying people their freedoms. They launched a war of aggression against their neighbours, encouraged, and committed wholescale genocide across many borders, ...but the shit eventually caught up with them, and they lost the war. Fast Forward ... due to their many illegal acts, and outright evil attrocities you were essentially screwed, tattooed, and up the creek without a paddle if you had any gold with the Nazi hallmarks... (unless you had your own refinery and could melt down your gold yourself...) you were fvcked.

Who is to say that some other country may not one day run afoul of international standards in much the same way the Nazi's did? International indignation against the Nazi's was pretty widespread... even among countries who were not at all affected by their actions. Who is to say that some other country may not one day find themselves a pariah among nations, and may find their hallmarks and symbols shunned by all others? Especially if the acts of that nation fvcked over other nations big time? Can you imagine the anger and wrath against a nation that could single-handedly fuck up the whole world... whether by incompetence, stupidity, whoremongering, war mongering or just plain hubris? Can you imagine the anger and wrath that could be exibited by other nations against a nation like that? Do you remember what happened to the Kruggerand during the worldwide battle against SA apartheid?

I don't know about you, but I personally would not want to be holding gold minted by any country with the potential to become a pariah among nations.

You can melt down, refashion and will to progeny a gold eagle issued by the U.S. Mint just as easily as you can melt down, refashion and will to progeny a bar from Engelhard. Ironically enough, Karatbars are the least flexible here.

Then I suppose I must be mistaken in my belief that it is illegal to melt currency.Actually I believe Karatbars are the most flexible, but that is a matter of opinion.An opinion based on insider knowledge, and an opinion based on assumption.And by insider knowledge I mean... on the inside looking out, verses on the outside looking.

Privately vaulted gold is trivially turned over. The 6102 Executive Order required that all gold be turned over (listing only a handful of exceptions) whether it was held by people or corporations and regardless of form or issuer, and provided for penalties for non-compliance. Private companies complied readily.

How many private vaults abroad turned over the vaulted gold of American citizens?

Even if... and I do mean IF a private facility were inclined to do such a thing... they would have to know which country the individual is a citizen of in order to do so. They would also need to know what you have in the vault is in fact gold.

And sure, you can keep your gold vaulted in another country, but that comes with a host of other issues. First and foremost is that you've doubled your risk. You now have to worry about the legal environment in your country and in the country in which your gold is vaulted. If the company vaulting your gold is incorporated in a third country, you've tripled your original risk and have to worry about yet another legal environment.

Perhaps... however that is where the DD comes in. How do you feel about the political environment at home? All jingoism aside... how do you feel it compares with other jurisdictions vis-a-vis private property rights, taxes, or any other issue you hold dear to your heart etc., etc.,? I mean... I'm not necessarily fond of their weather, but if I were a gun nut, ...Switzerland would be my wet dream.

Beyond the fact that the company that owns the vault still operates within the legal framework of the country in which the vault is located you also have to consider that the company could be compelled to appear before a Court in any country in which it does business (since by doing so it has, likely, subjected itself to the laws of said country).

Yes, ...again proper DD is in order. Are there any jurisdictions whose laws are more in tune with your personal sentiments? Are there any jurisdictions whose laws support your desires better than those at home? I know there are many Americans who prefer the laws & legislation of foreign jurisdictions regarding these types of things. There is a reason for this. Perhaps many should find out why.

Of course, there's also the issue of ease of access - something you frequently bring up. How easily can you access that gold if it's, say, Germany and you're located in the United States? The time difference alone could be an issue.

You gave Germany as an example, so I will go with that. I suppose it would be determined by what type of gold one held in Germany and in what form. If it were Krugerrands held in a vault, I'm not sure how one would handle it. I know that if one were holding Karatbars, one could simply execute sell instructions, in any amount desired, and your gold would be purchased back at the highest guaranteed buyback price and the cash deposited on a debit card. Your money can be accessed through any ATM or transferred into any bank account of your choosing.

In other words, your risk of confiscation by legislative action has increased by 100%. Got it.

Not at all accurate. In fact... far from it.But for those who do not trust any facility to vault their metals... they are always free to take delivery on them. They can stuff them under their mattresses, or dig a hole in their back yard and bury it if they want.

It's true that *I* am not operating under Saudi laws. But you're mixing apples and oranges. My booze isn't kept in a vault in Saudi Arabia. If it was Saudi laws vis-à-vis alcohol would certainly apply. Not to mention that pouring a glass would be a huge pain in the ass.

Perhaps that's why so many Saudis so enjoy visiting your fair city

On that note, I will bid you a good night. I have a full day tomorrow and need my beauty sleep.

The only way significant money can be made with precious metal is with leveraged commodities future trading...and most traders don't succeed.

My primary concern is not making money with gold, ...but rather saving money in gold, and using gold as insurance. If I buy 2 ounces gold at $2,000 an ounce, ...and the price drops to $1,000 an ounce... I haven't lost a thing. I still have my 2 ounces of gold. My game plan is long term, I'm not planning to sell it. I know eventually it will go back up again, and will most likely surpass the original price I purchased it at. in the meantime... I will view any pull backs as a buying opportunity to dollar cost average. In the end... I will have a nice little pot convertible into whatever currency I choose at some later date, if I choose to convert, ...or a nice little pot I can will to create and maintain generational wealth.

For me Gold is INSURANCE against what I believe to be an inevitable shit storm of unfathomable proportions.

For every 4 dollars I put aside, I make sure I take 1, and put it into gold. And thankfully my supplier makes it possible to for me to accelerate & magnify my acquisition of gold & cash through a leveraged system that acquires the gold for me virtually free.

I'm sorry, but youtube videos referencing someone whose business involves peddling gold and silver ($11,000/ounce any time now!!!) while writing alarmist books about the coming collapse for the dollar (it's been coming now for almost a decade... is it here yet? the hot appetizers are gonna get cold soon!) and who sees conspiracies don't count for very much in my book.

Do you have some objective evidence, perhaps?

That isn't my video. I specifically used that one because it answered your question and was not in any way connected to me at all. It happened to be linked in someone else's sig line in another forum of which I am a member. Sorry.

As for alarmist books by objective sources... there's Jim Rickards Currency Wars... Chris Martensen's Crash Course... and while I realize you are reflexively biased against Mike Maloney... he is definitely worth a read.

I really don't know what to tell you. It seems any information I provide you with will be viewed as unobjective simply because I am pro gold. by that very same line of reasoning, are we to assume anything you have to say is similarly lacking in objectivity because you are pro FRN?

Dude, your FRN has only 2% of the purchasing power it had 100 yrs ago,...whereas my gold has kept up with and even gotten ahead of inflation.

If a FRN was dynamite, ...it wouldn't have the explosive power to blow your nose.

I still don't see the reason to get rid of any of my gold what little I have.

Well, that speaks for itself, aye?

Also, I'm not sure what you're on about as far as Amreeka is concerned, but there are a variety of investment products besides gold that don't have overmuch to do with the world hegemon's finances and which returned a bit more than gold's -24% the last year and a half.

For me Gold is INSURANCE against what I believe to be an inevitable shit storm of unfathomable proportions.

Ah, so it's no longer an investment vehicle or a potentially significant future medium of exchange; now it's simply insurance? Very well. But this still leads to a host of questions about your (or anyone else's) gold-hoarding strategy;

1. What is gold insurance against, precisely? Insurance products tend to have a definite set of events which they protect against, whether they be life insurance, CDS's, car insurance, or what have you. How can you ever justify the cost of an insurance product if it's just "Anti-Bad Stuff Insurance!", ipso facto lacking a definite, calculable value?

2. Speaking of calculable value, even if you had a definite set of events you were insuring against, before it'd be rational to horde gold you'd at least need a good idea of the probability that one or more of these events would occur in order to calculate the value of your insurance. Have you done any such thing? How can it be rational to buy insurance for unknown events with utterly indeterminate probabilities of occurring? This is to say nothing of the value of alternative ways of utilizing your money.

3. Speaking of alternative ways of utilizing your money, your strategy only makes sense if it is more valuable than its opportunity cost, or what you could be doing with that money instead. Have you considered what else that money could have done for you? Maybe you don't mind that money having lost 24% of its value this last year, since you indicate you've got a long time horizon.

4. Speaking of time horizons, how long is yours, exactly? We're all dead in the long run and without a clear horizon for your "insurance policy," just holding onto it indefinitely makes little to no sense -- in fact, it's horrendous investment practice. With substantial research indicating gold's value has little relation to inflation, the 'inflationary hedge' reasoning is out the window (but even that would rationally be adopted with a definite timeline). If you'll simply hold onto it until 59.5 years, say, then you're just gambling -- with 1/4th of the money you've earned. That's an awful lot of risk capital, given what you've done with it isn't rational to begin with (see 1.-4.).

5. These are very basic questions that anybody in your position would do well to consider -- in fact, they'd have already thought of all this and developed approximate answers before going for such a wild strategy. I'm not asking you to bust out spreadsheets at this point in time; I'm simply worrying in textual form over your consistent lack of competence explicating your strategy and answering basic questions about it.

It would be unfortunate if someone sincerely and without malicious intent got caught up with a company whose structure has a very high correspondence with scamming and thievery (MLM) and got screwed or otherwise wasted capital (thereby screwing or wasting the capital of their kid(s)) due to a lack of knowledge, succumbing to the age-old promise of acquiring the financial equivalent of the "Philosopher's Stone": easy, above average returns without too much understanding or effort required. It would be worse still if this person served as a vector for spreading the misinformed strategy about, with similarly negative effects upon those influenced.

Countering something like that makes putting a bit of effort into calling out bullshit worth it.

Gold is a hedge against currency destabilization or high inflation, also as a currency exchange in underground economies. Gold and silver (and plat. Family) are the only form of exchange that is accepted worldwide and is available to individuals. Try lugging a barrel of oil or a bushel of wheat to trade.

"Fed’s agents hit the market with 500 tons of naked shorts. Normally, a short is when an investor thinks the price of a stock or commodity is going to fall. He wants to sell the item in advance of the fall, pocket the money, and then buy the item back after it falls in price, thus making money on the short sale. If he doesn’t have the item, he borrows it from someone who does, putting up cash collateral equal to the current market price. Then he sells the item, waits for it to fall in price, buys it back at the lower price and returns it to the owner who returns his collateral. If enough shorts are sold, the result can be to drive down the market price.

A naked short is when the short seller does not have or borrow the item that he shorts, but sells shorts regardless. In the paper gold market, the participants are betting on gold prices and are content with the monetary payment. Therefore, generally, as participants are not interested in taking delivery of the gold, naked shorts do not need to be covered with the physical metal.

In other words, with naked shorts, no physical metal is actually sold."

For Americans, financial and economic Armageddon might be close at hand. The evidence for this conclusion is the concerted effort by the Federal Reserve and its dependent financial institutions to scare people away from gold and silver by driving down their prices.

When gold prices hit $1,917.50 an ounce on August 23, 2011, a gain of more than $500 an ounce in less than 8 months, capping a rise over a decade from $272 at the end of December 2000, the Federal Reserve panicked. With the US dollar losing value so rapidly compared to the world standard for money, the Federal Reserve’s policy of printing $1 trillion annually in order to support the impaired balance sheets of banks and to finance the federal deficit was placed in danger. Who could believe the dollar’s exchange rate in relation to other currencies when the dollar was collapsing in value in relation to gold and silver.

The Federal Reserve realized that its massive purchase of bonds in order to keep theirprices high (and thus interest rates low) was threatened by the dollar’s rapid loss of value in terms of gold and silver. The Federal Reserve was concerned that large holders of US dollars, such as the central banks of China and Japan and the OPEC sovereign investment funds, might join the flight of individual investors away from the US dollar, thus ending in the fall of the dollar’s foreign exchange value and thus decline in US bond and stock prices.

Intelligent people could see that the US government could not afford the long and numerous wars that the neoconservatives were engineering or the loss of tax base and consumer income from offshoring millions of US middle class jobs for the sake of executive bonuses and shareholder capital gains. They could see what was in the cards, and began exiting the dollar for gold and silver.

Central banks are slower to act. Saudi Arabia and the oil emirates are dependent on US protection and do not want to anger their protector. Japan is a puppet state that is careful in its relationship with its master. China wanted to hold on to the American consumer market for as long as that market existed. It was individuals who began the exit from the US dollar.

When gold topped $1,900, Washington put out the story that gold was a bubble. The presstitute media fell in line with Washington’s propaganda. “Gold looking a bit bubbly” declared CNN Money on August 23, 2011.

The Federal Reserve used its dependent “banks too big to fail” to short the precious metals markets. By selling naked shorts in the paper bullion market against the rising demand for physical possession, the Federal Reserve was able to drive the price of gold down to $1,750 and keep it more or less capped there until recently, when a concerted effort on April 2-3, 2013, drove gold down to $1,557 and silver, which had approached $50 per ounce in 2011, down to $27.

The Federal Reserve began its April Fool’s assault on gold by sending the word to brokerage houses, which quickly went out to clients, that hedge funds and other large investors were going to unload their gold positions and that clients should get out of the precious metal market prior to these sales. As this inside information was the government’s own strategy, individuals cannot be prosecuted for acting on it. By this operation, the Federal Reserve, a totally corrupt entity, was able to combine individual flight with institutional flight. Bullion prices took a big hit, and bullishness departed from the gold and silver markets. The flow of dollars into bullion, which threatened to become a torrent, was stopped.

For now it seems that the Fed has succeeded in creating wariness among Americans about the virtues of gold and silver, and thus the Federal Reserve has extended the time that it can print money to keep the house of cards standing. This time could be short or it could last a couple of years.

However, for the Russians and Chinese, whose central banks have more dollars than they any longer want, and for the 1.3 billion Indians in India, the low dollar price for gold that the Federal Reserve has engineered is an opportunity. They see the opportunity that the Federal Reserve has given them to purchase gold at $350-$400 an ounce less than two years ago as a gift.

The Federal Reserve’s attack on bullion is an act of desperation that, when widely recognized, will doom its policy.

As I have explained previously, the orchestrated move against gold and silver is to protect the exchange value of the US dollar. If bullion were not a threat, the government would not be attacking it.

The Federal Reserve is creating $1 trillion new dollars per year, but the world is moving away from the use of the dollar for international payments and, thus, as reserve currency. The result is an increase in supply and a decrease in demand. This means a falling exchange value of the dollar, domestic inflation from rising import prices, and a rising interest rate and collapsing bond, stock and real estate markets.

The Federal Reserve’s orchestration against bullion cannot ultimately succeed. It is designed to gain time for the Federal Reserve to be able to continue financing the federal budget deficit by printing money and also to keep interest rates low and debt prices high in order to support the banks’ balance sheets.

When the Federal Reserve can no longer print due to dollar decline which printing would make worse, US bank deposits and pensions could be grabbed in order to finance the federal budget deficit for couple of more years. Anything to stave off the final catastrophe.

The manipulation of the bullion market is illegal, but as government is doing it the law will not be enforced.

By its obvious and concerted attack on gold and silver, the US government could not give any clearer warning that trouble is approaching. The values of the dollar and of financial assets denominated in dollars are in doubt.

Those who believe in government and those who believe in deregulation will be proved equally wrong. The United States of America is past its zenith. As I predicted early in the 21st century, in 20 years the US will be a third world country. We are halfway there.

Dr. Roberts (born April 3, 1939) is an American economist, a columnist for Creators Syndicate and recent author of “The Failure Of Laissaz Faire Capitalism”. He served as an Assistant Secretary of the Treasury in the Reagan Administration earning fame as a co-founder of Reaganomics. He is a former editor and columnist for the Wall Street Journal, Business Week, and Scripps Howard News Service who has testified before congressional committees on 30 occasions on issues of economic policy. Roberts has written extensively that during the 21st century the Bush and Obama administrations have destroyed the US Constitution's protections of Americans' civil liberties, such as habeas corpus and due process in the name of "the war on terror." Roberts has been a critic of both Democratic and Republican administrations

Roberts is a graduate of the Georgia Institute of Technology and holds a Ph.D. from the University of Virginia. He was a post-graduate at the University of California, Berkeley and at Merton College, Oxford University. His first scholarly article (Classica et Mediaevalia) was a reformulation of "The Pirenne Thesis."In Alienation and the Soviet Economy (1971), Roberts explained the Soviet economy as the outcome of a struggle between inordinate aspirations and a refractory reality. He argued that the Soviet economy was not centrally planned, but that its institutions, such as material supply, reflected the original Marxist aspirations to establish a non-market mode of production. In Marx's Theory of Exchange (1973), Roberts argued that Marx was an organizational theorist whose materialist conception of history ruled out good will as an effective force for change.

From 1975 to 1978, Roberts served on the congressional staff. As economic counsel to Congressman Jack Kemp he drafted the Kemp-Roth bill (which became the Economic Recovery Tax Act of 1981) and played a leading role in developing bipartisan support for a supply-side economic policy. His influential 1978 article for Harper's, while economic counsel to Senator Orrin Hatch, had Wall Street Journal editor Robert L. Bartley give him an editorial slot, which he had until 1980. He was a senior fellow in political economy at the Center for Strategic and International Studies, then part of Georgetown University.

From early 1981 to January 1982 he served as Assistant Secretary of the Treasury for Economic Policy. President Ronald Reagan and Treasury Secretary Donald Regan credited him with a major role in the Economic Recovery Tax Act of 1981, and he was awarded the Treasury Department's Meritorious Service Award for "outstanding contributions to the formulation of United States economic policy." Roberts resigned in January 1982 to become the first occupant of the William E. Simon Chair for Economic Policy at the Center for Strategic and International Studies, then part of Georgetown University. He held this position until 1993. He went on to write The Supply-Side Revolution (1984), in which he explained the reformulation of macroeconomic theory and policy that he had helped to create.

He was a Distinguished Fellow at the Cato Institute from 1993 to 1996. He was a Senior Research Fellow at the Hoover Institution.

In The New Color Line (1995), Roberts argued that the Civil Rights Act was subverted by the bureaucrats who applied it and, by being used to create status-based privileges, became a threat to the Fourteenth Amendment in whose name it was passed. In The Tyranny of Good Intentions (2000), Roberts documented what he saw as the erosion of the Blackstonian legal principles that ensure that law is a shield of the innocent and not a weapon in the hands of government.

NOTE: Gold weights are based on metric tons and Troy ounces. 500 metric tons of gold would be 16,075,000 troy ounces. This changes the arithmetic slightly but not the point

I was the first to point out that the Federal Reserve was rigging all markets, not merely bond prices and interest rates, and that the Fed is rigging the bullion market in order to protect the US dollar’s exchange value, which is threatened by the Fed’s quantitative easing. With the Fed adding to the supply of dollars faster than the demand for dollars is increasing, the price or exchange value of the dollar is set up to fall.

A fall in the dollar’s exchange rate would push up import prices and, thereby, domestic inflation, and the Fed would lose control over interest rates. The bond market would collapse and with it the values of debt-related derivatives on the “banks too big too fail” balance sheets. The financial system would be in turmoil, and panic would reign.

Rapidly rising bullion prices were an indication of loss of confidence in the dollar and were signaling a drop in the dollar’s exchange rate. The Fed used naked shorts in the paper gold market to offset the price effect of a rising demand for bullion possession. Short sales that drive down the price trigger stop-loss orders that automatically lead to individual sales of bullion holdings once their loss limits are reached.

According to Andrew Maguire, on Friday, April 12, the Fed’s agents hit the market with 500 tons of naked shorts. Normally, a short is when an investor thinks the price of a stock or commodity is going to fall. He wants to sell the item in advance of the fall, pocket the money, and then buy the item back after it falls in price, thus making money on the short sale. If he doesn’t have the item, he borrows it from someone who does, putting up cash collateral equal to the current market price. Then he sells the item, waits for it to fall in price, buys it back at the lower price and returns it to the owner who returns his collateral. If enough shorts are sold, the result can be to drive down the market price.

A naked short is when the short seller does not have or borrow the item that he shorts, but sells shorts regardless. In the paper gold market, the participants are betting on gold prices and are content with the monetary payment. Therefore, generally, as participants are not interested in taking delivery of the gold, naked shorts do not need to be covered with the physical metal.

In other words, with naked shorts, no physical metal is actually sold.

People ask me how I know that the Fed is rigging the bullion price and seem surprised that anyone would think the Fed and its bullion bank agents would do such a thing, despite the public knowledge that the Fed is rigging the bond market and the banks with the Fed’s knowledge rigged the Libor rate. The answer is that the circumstantial evidence is powerful.

Consider the 500 tons of paper gold sold on Friday. Begin with the question, how many ounces is 500 tons? There are 2,000 pounds to one ton. 500 tons equal 1,000,000 pounds. There are 16 ounces to one pound, which comes to 16 million ounces of short sales on Friday.

Who has 16 million ounces of gold? At the beginning gold price that day of about $1,550, that comes to $24,800,000,000. Who has that kind of money?

What happens when 500 tons of gold sales are dumped on the market at one time or on one day? Correct, it drives the price down. Investors who want to get out of large positions would spread sales out over time so as not to lower their sales proceeds. The sale took gold down by about $73 per ounce. That means the seller or sellers lost up to $73 dollars 16 million times, or $1,168,000,000.

Who can afford to lose that kind of money? Only a central bank that can print it.

I believe that the authorities would like to drive the gold price down further and will, if they can, hit the gold market twice more next week and put gold at $1,400 per ounce or lower. The successive declines could perhaps spook individual holders of physical gold and result in actual net sales of physical gold as people reduced their holdings of the metal.

However, bullion dealer Bill Haynes told kingworldnews.com that last Friday bullion purchasers among the public outpaced sellers by 50 to 1, and that the premiums over the spot price on gold and silver coins are the highest in decades. I myself checked with Gainesville Coins and was told that far more buyers than sellers had responded to the price drop.

Unless the authorities have the actual metal with which to back up the short selling, they could be met with demands for deliveries. Unable to cover the shorts with real metal, the scheme would be exposed.

Do the authorities have the metal with which to cover shorts? I do not know. However, knowledgeable dealers are suspicious. Some think that US physical stocks of gold were used up in sales in efforts to disrupt the rise in the gold price from $272 in December 2000 to $1,900 in 2011. They point to Germany’s recent request that the US return the German gold stored in the US, and to the US government’s reply that it would return the gold piecemeal over seven years. If the US has the gold, why not return it to Germany?

The clear implication is that the US cannot deliver the gold.

Andrew Maguire also reports that foreign central banks, especially China, are loading up on physical gold at the low prices made possible by the short selling. If central banks are using their dollar holdings to purchase bullion at bargain prices, the likely results will be pressure on the dollar’s exchange value and a declining market supply of physical bullion. In other words, by trying to protect the dollar from its quantitative easing policy, the Fed might be hastening the dollar’s demise.

Possibly the Fed fears a dollar crisis or derivative blowup is nearing and is trying to reset the gold/dollar price prior to the outbreak of trouble. If ill winds are forecast, the Fed might feel it is better positioned to deal with crisis if the price of bullion is lower and confidence in bullion as a refuge has been shaken.

In addition to short selling that is clearly intended to drive down the gold price, orchestration is also indicated by the advance announcements this month first from brokerage houses and then from Goldman Sachs that hedge funds and institutional investors would be selling their gold positions. The purpose of these announcements was to encourage individual investors to get out of gold before the big boys did. Does anyone believe that hedge funds and Wall Street would announce their sales in advance so the small fry can get out of gold at a higher price than they do?

If these advanced announcements are not orchestration, what are they?

I see the orchestrated effort to suppress the price of gold and silver as a sign that the authorities are frightened that trouble is brewing that they cannot control unless there is strong confidence in the dollar. Otherwise, what is the point of the heavy short selling and orchestrated announcements of gold sales in advance of the sales?